I have no historical information as to WHY it became the size it did, but an interesting (at least to me) bit of hearsay on the effect of bottle size. As Robin notes in his wine advisor, both liquor and wine eventually assumed the same general size. And whether that had to do with easy carrying size, or lung capacity of glass blowers, it did have an impact on the game of golf. It is widely reported, and believed by many, that the modern game of golf is 18 holes, rather than 7, or 11, or 25, because that is (or at least was) the number of shots in a bottle of scotch, and when early scottish players of the game consumed a shot a hole, they were done (both with the bottle and probably their ability to navigate home) after 18 holes.

I would prefer the 500 ml size, except that if things were reduced to that size we would still be paying the same prices. Think of the slogan: "New, more convenient packaging!" There would be no mention that it was smaller, and the price would not change.